Mr Whelan became the third victim of the secret loan scandal which cost former Trade Secretary Peter Mandelson and former Paymaster General Geoffrey Robinson their jobs.

Charlie Whelan will quit at an "appropriate opportunity"

Mr Whelan chose to quit after weeks of speculation he was behind the revelation Mr Mandelson borrowed £373,000 from millionaire Mr Robinson to buy a £475,000 house in London's fashionable Notting Hill.

The robust spin doctor said on Monday he would leave his job at the Treasury as soon as an "appropriate opportunity" became available.

The Tories are continuing to step up the pressure on the government over the affair by calling for a good deal of time to elapse before Mr Whelan found a new job, especially if it was in the City.

Conservative Party Chairman Michael Ancram told BBC Radio 4's Today programme Mr Whelan should not see any more Treasury papers, particularly those relating to the Budget.

Mr Ancram has written to Cabinet Secretary Sir Richard Wilson saying Mr Whelan should not be allowed to take a job in the City without a "quarantine" period.

Michael Ancram: "Whelan must go now"

He said: "I asked the Cabinet secretary to reassure us that the normal rules of a three-month gap, seeking approval from the Cabinet secretary himself to take a job, would be applied."

Mr Whelan should not see anything which would be useful for him to get a new job, said Mr Ancram.

He added: "I think this is bad for the Treasury, bad for the integrity of government, and I believe he should go now."

Questions have also been asked to where Mr Brown was on Monday - the day when the euro started trading on financial markets in London as well as the resignation of his controversial aide.

A Treasury spokesman said the Chancellor was working in his Dunfermline East constituency, but reporters failed to track him down.

He made no public comment on the loss of his most trusted aide.

It is expected Mr Brown's new choice of spin doctor will be vetted by Number 10.

Mr Whelan was one of four key players in Labour's media team which helped win the 1997 general election.

Headed by Peter Mandelson, the spin doctors included Alastair Campbell, David Hill and Mr Whelan. Mr Campbell is the only one left in high office.

Mr Whelan is the Treasury's second casualty over the loan affair, following the loss of Mr Robinson, who was also a close colleague of the chancellor.

Mr Robinson's position had remained vacant for nearly two weeks until the appointment of Dawn Primarolo, another follower of Mr Brown.

The Mirror newspaper has claimed Mr Brown's elder brother John was behind the leaking of a letter Mr Mandelson wrote to the chancellor in opposition.